- Australian Dollar (AUD) rallies as market mood improves
- Optimism surrounding additional US fiscal stimulus rises dragging on US Dollar (USD)
- US ADP beats forecasts, jobless claims also improve
- US manufacturing data in focus
The Australian Dollar US Dollar (AUD/USD) exchange rate is extending gains for a fourth straight session on Thursday. The pair settled +0.5% higher on Wednesday at US$0.7161. At 13:15 UTC, AUD/USD trades +0.4% higher at US$0.7189.
The risk sensitive Australian Dollar is pushing higher on a broad upbeat mood in the market. Investors are optimistic about a US fiscal stimulus deal and are cheering upbeat jobs data whilst shrugging off concerns about a contested election.
Reports that US Congress could be close to a compromise for an additional US fiscal stimulus package is boosting risk appetite. US Treasury Secretary Steve Mnuchin said that talks with Democrat House Speaker Nancy Pelosi are progressing well. The Democrats put forward a $2.2 trillion rescue package whilst the Republicans have proposed a $1.6 trillion package. Optimism is growing that the two sides will be able to agree a deal, potentially this week if not, next week. Finally, a stimulus deal before the US elections looks likely.
Yesterday US ADP private payroll data revealed that 749,000 new private sector jobs were created in September, up from the upwardly revised 481,000 in August, and around 100,000 higher than the 650,000 that analysts had expected.
Today US jobless claims added to the upbeat tone surrounding the recovery in the US labour market, by improving, albeit very slightly. New applications for unemployment benefits in the US declined to 837,000, down from 850,000 the previous week. However, fall each week is decreasing pointing to the recovery losing some momentum. However, the data beat forecasts.
Both forecast beating labour market data suggests that tomorrow’s non-farm payroll numbers could be better than expected.
Attention is now turning towards US -manufacturing figures which are expected to show that the recovery in the US manufacturing sector is also slowing slightly.